Unemployment Part II

Unemployment Part II - PRINCIPLES OF MACROECONOMICS...

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PRINCIPLES OF MACROECONOMICS UNEMPLOYMENT Or the statistic that determines elections Foster
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2 Cyclical unemployment Unemployment associated with the short-run fluctuations of the business cycle, such as unemployment due to a recession when there is insufficient demand for goods and services in an economy. Example: Auto workers who lost their jobs when Ford cut production during the 2008 recession. What causes unemployment?
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0 2 4 6 8 10 12 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 U.S. Unemployment, 1960-2007 Natural rate of unemployment Unemployment rate percentage of labor force 3
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Why is the Natural Rate of Unemployment Higher than 0%? Even when the economy is doing well, there is always some unemployment. Frictional unemployment Frictional unemployment is unemployment due to normal turnover in the labor market, such as when people change occupations or are new entrants. Short-term
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Unemployment Part II - PRINCIPLES OF MACROECONOMICS...

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